Corporate Gifts & Entertainment: A Survey of Practices
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1 Crprate Gifts & Entertainment: A Survey f Practices A survey by the Health Care Cmpliance Assciatin & the Sciety f Crprate Cmpliance and Ethics March 2009 Health Care Cmpliance Assciatin and Sciety f Crprate Cmpliance and Ethics 6500 Barrie Rad, Suite 250, Minneaplis, MN HCCA SCCE r
2 Executive Summary Despite the reprts f lavish executive pay, when it cmes t entertainment and gift giving, the business wrld may be far less generus than peple think. A survey f cmpliance and ethics prfessinals revealed that, n the whle, business is fairly restrictive f the gifts emplyees can give and receive and hw they can entertain. Abut tw-thirds (63%) either ban gifts t emplyees r require that they be mdest r at a price less than $50. And, with the numbers fr entertainment cmparable at 62%, the data des nt suggest that business is n an entertainment spree. Still, the data revealed areas f incnsistency. On balance, the healthcare industry was far mre restrictive than industry as a whle in these areas, and there were differences between the frand nn prfit sectrs f the ecnmy. Perhaps mst intriguing f all is the fact that mst cmpanies have nt revised their gifts and entertainment plicy significantly since the meltdwn. While the data des nt shw that cmpanies are entertaining lavishly, at least nt as a rule, there may be a need t revisit plicies in light f changes in the ecnmy. access gift plicies & prcedures and template samples c l i c k h e r e t g n l i n e HCCA / SCCE 1
3 Detailed Findings While lavish crprate gifts may grab the headline, mst cmpliance and ethics prfessinals reprt fairly mdest gift allwances. 16% f respndents reprted that their cmpanies d nt allw emplyees t receive any gifts at all. Anther 3 specify that their cmpany limits gifts t less than $50 and anther 16% reprt that, while their cmpany desn t specify a number, gifts are required t be mdest. That means just 1 f cmpanies allw their emplyees t receive a gift f $101 r mre. What is the limit n gifts yur rganizatin will allw yur emplyees t receive? We dn t have a plicy 4% We dn t specify a number but require that gifts be mdest 16% We allw gifts but dn t specify a number 2% The limit is mre than $600 $301 $600 $101 $300 9% $50 $100 19% Less than $50 3 N gifts are allwed 16% 5% 1 15% 2 25% 3 35% Where yu wrk, thugh, des have an impact n the dllar value f gifts yu can receive. Gift limits fr public cmpanies tended t be higher than thse fr private cmpanies r the sample as a whle. Abut 1 in 5 public cmpany respndents reprted that their cmpanies permitted gifts f $101 r mre, almst duble that f the sample as a whle. Hwever, health- 2 HCCA / SCCE
4 care was far mre restrictive. 2 prhibited emplyees frm receiving gifts vs. just 9% utside f healthcare. 6 53% 5 Please indicate whether yu wrk at a: % 33% 14% 13% N gifts are allwed 25% 24% 38% 22% 18% 19% 24% 19% 17% 17% 1 18% 6% 6% 2% Gvernmental entity Nn-prfit rganizatin Educatinal Institutin Public Cmpany Private Cmpany Less than $50 $50 $100 $101 $300 $301 $600 The limit is mre than $600 36% 4% 2% We allw gifts but dn t specify a number % 6% 5%5% 1 3% We dn t We dn t have specify a a plicy number but require that gifts be mdest 35% 3 25% % 27% 17% D yu wrk in healthcare? N Yes 22% 15% 14% 1 9% 5% N gifts are allwed 5% Less than $50 $50- $100 $101- $300 $301-$600 The limit is mre than $600 HCCA / SCCE 2% 2% We allw gifts but dn t specify a number We dn t specify a number but require that gifts be mdest 5% 2% We dn t have a plicy 3
5 Limits n entertainment tended t als be fairly restrictive utside f the business wrld. 23% f all respndents reprted that their emplyers d nt allw emplyees t be entertained by vendrs and ther utside parties. An additinal 12% have a limit f $50, and 27% dn t have a specific limit but require a mdest level f entertainment. As might be expected, gvernmental entities and academic institutins were abut twice as likely (49% and 44% respectively) t ban entertainment, and 27% f healthcare rganizatins ban it as cmpared t 14% f cmpanies utside f this industry. When yur emplyees are being entertained by vendrs and ther utside parties, what limit d yu set n hw much can be spent n the entertainment? We dn t have a plicy 8% We dn t specify a number but require that entertainment be mdest 27% We allw entertainment but dn t specify a number 8% The limit is mre than $600 $301 $600 $101 $300 $50 $100 Less than $ % N entertainment is allwed 23% 5% 1 15% 2 25% 3 4 HCCA / SCCE
6 5 45% 4 35% 3 25% 2 15% 1 5% 44% 18% 16% 49% 24% N entertainment is allwed 12% 5% 6% 17% 14% 13% 14% 8% 6% Please indicate whether yu wrk at a: 9% 19% 12% 1 5% Gvernmental entity Nn-prfit rganizatin Educatinal Institutin Public Cmpany Private Cmpany 2% Less than $50 $50- $100 $101- $300 $301-$600 The limit is mre than $600 7% 12% 7% 6% 6% We allw entertainment but dn t specify a number 33% 25% 17% 28% We dn t specify a number but require that entertainment be mdest % 9% 7% We dn t have a plicy HCCA / SCCE 5
7 Interestingly, the survey revealed that it is easer t receive than t give. Emplyers were mre likely t restrict the giving f gifts than the receiving f them. While just 16% f rganizatins banned emplyees frm receiving gifts, 27% banned the giving f them. This was driven by mre restrictive plicies by academic, nnprfit and gvernmental respndents, as well as by healthcare. 34% f healthcare rganizatins ban the giving f gifts, and just 12% utside f the industry d s. What is the limit n gifts yur rganizatin will allw emplyees t give t clients and ther utside parties with which yu d business? We dn t have a plicy 13% We dn t specify a number but require that gifts be mdest 18% We allw gifts but dn t specify a number 4% The limit is mre than $600 $301 $600 $101 $300 7% $50 $100 12% Less than $50 17% N gifts are allwed 27% 5% 1 15% 2 25% 3 6 HCCA / SCCE
8 When it cmes t entertaining and being entertained, the data was mre cnsistent. As a whle, the respndent s emplyers reprted plicies fr entertaining were remarkably similar t thse fr being entertained. 23% d nt allw their emplyees t be entertained, the same percentage that prhibit entertaining. Likewise, 27% require that entertainment be mdest just as they required that entertainment f their emplyees be mdest. Here, t, it shuld be nted that the fr-prfit sectr tends t be less restrictive than the nn-prfit sectr. When yur emplyees are entertaining custmers and ther utside parties with which yu d business, what limit d yu set n hw much can be spent n entertainment? We dn t have a plicy 13% We dn t specify a number but require that entertainment be mdest 27% We allw entertainment but dn t specify a number 1 The limit is mre than $600 $301 $600 $101 $300 9% $50 $100 7% Less than $50 9% N entertainment is allwed 23% 5% 1 15% 2 25% 3 HCCA / SCCE 7
9 Gift plicies tend t be calculated n a per-gift basis, rather than ver time. 63% measure gifts individually rather than the ttal value f all gifts given ver a perid f time. And while the numbers vary by type f emplyer, in all categries f fr, and nt fr prfit rganizatins, per gift calculatins predminate. Are yur rganizatin s gifts and entertainment limits, if yu have them, calculated n a: Cumulative basis ver a perid f time 37% Per gift r event basis 63% 8 HCCA / SCCE
10 When it cmes t the cntrversial practice f entertainment at strip clubs and ther adult venues, many rganizatins are silent n the tpics. 26% f respndents reprted that their emplyer des nt have a specific plicy in this area, and a surprising reprt that their cmpany permits this frm f entertainment. Des yur rganizatin permit either the entertainment f clients at r the entertainment f yur emplyees at strip clubs r ther adult venues? We d nt have a specific plicy in this area 26% We d nt permit this frm f entertainment 73% We permit this frm f entertainment HCCA / SCCE 9
11 Despite the changes in the ecnmy and well-publicized reprts f lavish pay by cmpanies receiving bail-ut mney, less than a third f respndents reprt that their rganizatin had updated its entertainment plicy in the last six mnths. 18% had their plicies significantly updated in the last 3 mnths and anther 9% reprt that the plicy had been updated in the last six mnths. And, ntably, 46% reprt that it has been mre than a year since their plicies were significantly updated. When was the last time yur rganizatin s entertainment plicy was significantly updated? Lnger than three years 2 Within the last three years 26% Within the last year 27% Within the last six mnths 9% Within the last three mnths 18% 5% 1 15% 2 25% 3 10 HCCA / SCCE
12 When it came t assessing where their rganizatins std vs. thers, respndents were very accurate. Thse wh claimed t have a gifts and entertainment plicy mre stringent than mst did, in fact, have ne that was mre restrictive. Likewise thse wh thught their plicies were abut the same as thers r less stringent were fairly accurate in their assessment. D yu think that yur rganizatin s entertainment plicy is: Less stringent than mst 15% Abut the same as thers 52% Mre stringent than mst 33% HCCA / SCCE 11
13 Cnclusins While bnuses have caught a great deal f attentin in a pstbailut ecnmy, any headlines abut lavish entertainment r gift giving have t be weighed against the wider data that demnstrates remarkably restrained behavir. Fr the mst part, rganizatins seem t be aviding behavirs in this area that culd raise eyebrws r appear t be imprperly affecting business relatinships. At the same time, rganizatins will likely need t revisit their gifts and entertainment plicies t reflect new scial and gvernmental expectatins. Many have plicies that have nt been reviewed fr several years and were frmulated at much richer, less-scrutinized times. In additin, the definitin f mdest gift-giving and entertaining may need t be revised dwnward. Survey Methdlgy Survey respnses were slicited during February and March 2009 frm cmpliance and ethics prfessinals in the database f the Health Care Cmpliance Assciatin and Sciety f Crprate Cmpliance and Ethics. Respnses were cllected and analyzed using Zmerang, a web-based third party slutin. Mre than 500 respnses were received. HCCA / SCCE 12
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